FCA on alert over share ramping

A case of alleged share ramping on AIM has been passed to the FCA in the latest scandal for London’s junior market.

A fake article was created and circulated on Twitter to inflate a company’s share price by a private trader, whose username on the social media site was Kevin Galliard.

The trader posted a picture of an article, purportedly by trade magazine Recruiter, claiming recruitment firm RTC Group was in talks with Swiss giant Adecco over a £21 million takeover – three times RTC’s value.

It caused the thinly-traded RTC shares to jump 6% amid unusually large volumes before they settled lower as word spread on the social media site that the article, which was littered with spelling and grammar mistakes, was bogus.

The trader has since shut down his Twitter account.

The Recruiter’s editor DeeDee Doke confirmed the article was a fake and said she had contacted the FCA.

A spokesman for the FCA could not confirm whether it was investigating the case due to its public disclosure rules, but a legal source said it was likely the watchdog would probe the matter, adding that it looked like a “classic ramping exercise”.

A spokeswoman for RTC said it was aware of the fake article, but would not comment on whether it had informed the FCA.

Adecco, or Addeco as it was mis-spelt in the opening line of the fake article, declined to comment.

It is the latest scandal on AIM following fraud investigations into Globo and Quindell and a string of scandals involving Chinese companies.

The fake article was retweeted by another trader operating under the pseudonym The AIM Casino, who denied knowing Kevin Galliard or having a part in the creation of the article. “I retweeted that's all not my tweet,” he said. He later deleted the retweet.

The AIM Casino, who did not give his real name, said he bought shares just before he retweeted the fake article, but said he ended up making a loss on the trade.